China's piecemeal approach to loosening monetary policy this year may be discreet, but the cumulative effect is proving just as powerful as an outright cut in bank reserves.
Wary of being criticized for not doing enough to wean the world's second-largest economy off its reliance on easy credit and heavy investment, authorities have ruled out major stimulus even as growth slowed to an 18-month low in the first quarter.
Instead, the People's Bank of China (PBOC) has relied on four low-key adjustments that have added a total of 550 billion yuan ($88 billion) into the banking system, a calculation based on a Reuters poll and information from sources shows.
That is equivalent to an economy-wide 50 basis point cut in the reserve requirement ratio (RRR), the level of reserves that banks must hold, a splashier move which would also have released 550 billion yuan in one stroke.
The four moves -- two reductions in the RRR for selected banks and two big loans to commercial banks -- are designed to direct cash to where its needed in the economy, and thwart speculative investment.
Characterizing these changes as a "fine-tuning", the central bank has been adamant that overall monetary policy has not changed and remains prudent.
"We need to take a holistic view about monetary easing," said Wei Yao, an economist at Societe Generale in Hong Kong.
"The approach is called 'fine-tuning' because they did it bit by bit, but the accumulated impact is not small."
More than meets the eye
Falls in the exchange rate and short-term interest rates have further loosened monetary conditions.
The rolling monthly average for the benchmark short-term interest rate, the seven-day bond repurchase rate, has fallen 110 points since April, when the stimulus steps began, to 3.7 percent. And the yuan has fallen 2.5 percent this year.